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tv   Worldwide Exchange  CNBC  November 25, 2013 4:00am-6:01am EST

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you're watching "worldwide exchange." i'm ross westgate. the headlines today, oil prices fall after western powers reach a landmark deal with iran. they met in at ttehran. >> this first step will create time and space over the next six months for more chances to fully address our comprehensive returns about the iranian program. airline stocks are flying
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high. peugot is lining up candidates to replace its ceo. and shares are down 4% in shanghai after friday's pipeline explosion and the death toll climbs to 52 people. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. a warm welcome to the program. we're one hour and one minute into the trading day in europe. the up side as you can see. nine to one advancers outpasz decliners and a little bit more on the dow jones stocks 600. we've had seven weeks of gains in the united states. low oil prices are benefitting risk/asset a little bit. nikkei 2.25. up 1.5%. shanghai composite down a little bit.
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hang seng is fairly flat. the ftse last week was down 19 points, .3% over the course of the week. this morning we're up half of 1%. zet tre dax is up three-quarters. fresh high. currently trading at 9,000. french car maker is doing well. prospect of changes as we say at peugot. french car makers were the significant share in iran. if there's a chance of restrictions being lifteds, they may reopen that market as well. let's break this down into sectors. the best sectors is travel and leisure. we saw it down nearly $3. we'll look at the oil prices, 108.05. on fears and hopes depending on what side of the market you're on with a significant easing or increase in production.
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oil and gas is the weakest sector as a result of that. other stocks we're looking at this morning as well. shares in fruselias medical. they'll reduce payments to dialysis patients. they're currently up 3.25%. they're trying to keep the chinese partner dong phen happy. iran was a market for french car makers, whether that is a problem. >> peugot used to make a significant part of their business in iran and had up to a 40% share in that country. that is, indeed, very good news for the french car maker. i'm not sure that's the positive market change today reflecting the possible departure of the
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current ceo. it's reflecting the fact that the negotiations with dong phen are going on. they are likely to enrich the deal. they have requested a management reshuffle as part of the deal. also the ceo is facing increasing pressure from the peugot family. there's no question that the peugot family wants a change. the former chief operating officer of rono is about to join them. he could be the first in line to become the first in line to be the ceo of the company. now as part of the plan the risk part of the package for peugot would involve 4 billion capital.
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3 billion from dongfeng and from the french state. all of this has not been officially confirmed yet. >> stefan, thanks for that. that's the latest out of france from the automakers. take a look at where we are with bond rates. we actually saw a fall. on that 2.75% yield is where we stand for a moment. at the end of the week we're at 2.78 and 2.79. 1.73 higher. gilt yield. on the currency market, dollar yen is up at a six point high. dollar yen. 101.69. we've been up to 101.89. euro dollar just above 135. weaker this morning and sterling was a percent higher. got up to 167. a little bit weaker this
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morning. the price of this is falling. 108.71 on brent. fears of greater supply to the market. nymex is down 93.53. this follows this historic deal between world powers and iran over the weekend. over four days of talks in geneva. they agreed to ease economic sanctions for iran for a six-month period in return forte ran curbing its nuclear activities. >> this first step will create time and space over the next six months for more negotiations to fully address our comprehensive concerns about the iranian program. because of this agreement, iran cannot use negotiations as cover to advance its program. >> iran's negotiators return
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home to cheering crowds with the foreign minister haled as an ambassador of peace. speaking in a national broadcast they said the six month period was the beginning of a new experience for the nation and eventually the redeem of sanctions would be broken. joining us for more, nbc's a man mohyeldin. you've been around many times. how did we get to this stage to have this agreement signed? >> well, there's no doubt there's a tremendous amount of pressure being levied against iran. the iranian leadership has changed. the more important development has been the election of the iranian president. that's certainly changed the diplomatic environment, if you will, between the united states and the iranian government. there's been an intensification of the governments. the historic phone call between u.s. president barack obama and
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president rouhani. the change in the political climate inside iran and the diplomatic arena made this deal possible. more importantly no doubt that the sanctions played a role in increasing the pressure on the iranian government and without a doubt the fact that these sanctions did not stop iran from developing its nuclear technology also was for the united states and its allies a major concern that indicated that perhaps these sanctions are not going to be enough. so a lot of changes on the ground that led to this agreement. keep in mind, this is a temporary agreement, not the comprehensive one. it is simply an attempt to try and create the environment for the next six months in which serious negotiations can be held to address all of the fundamental issues that are yet to be resolved. >> yeah. we have been here before. we had interim nuclear agreements between 2003 and 2005. they all failed as well. how much hope should be placed on this deal? >> well, there's no doubt there should be some cautious skepticism.
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that does not necessarily mean that the agreement is going to fail, but without a doubt there are different environments now. there are new realities in the middle east and more importantly some of those that we just mentioned including the changes on the ground are likely to give this agreement a possibility of success. many of the people i've been speaking to have expressed optimism. they say the real work will now begin over the next six months. if you look at some of the agreements details including allowing inspectors into iran's facilities on an almost daily activity, those are things that are historic. they will be perceived as important developments that could be the final break through in allowing iran to return to the community of nations but more importantly recognizing its right to nuclear technology. >> yes. there's a difference, isn't there, between the right to nuclear technology and right to enrichment. is there some confusion over that? >> well, it's all about
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intentions. the criticism against iran is that the nuclear program comes with the intention of developing nuclear weapons. iran has repeatedly argued against that. it just wants the right to develop nuclear technology as other countries has had. that is the argument they've made. it comes down to whether there are intentions that are trustworthy on both sides. the iranian government and people look at it as preventing them from developing nuclear technology, from becoming energy dependent or independent. there is a deep seeded mistrust on both sides. that's why it comes back to whether or not this agreement can foster a little bit of confidence. the u.s. believes this agreement will halt iran's nuclear program and will make them take actions reversing their ability to develop a nuclear bomb. >> all right. ayman, thanks for that. we'll catch you a little bit later. head to our website for more on this story.
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we'll ask if iran's break through nuclear deal could herald a long-term reduction in prices. follow us at cnbc world. death toll in one of the world's worst industrial accidents in china has risen to 52 with 11 people still missing. a pipe explosion in china has left 136 injured. president xi jinping is calling for help. british government advisors is accusing rbs for pushing viable businesses into a turn around. it's going to strip their assets and make more profits for the bank. the business secretary has demanded an urgent response and referred the report to city regulators. joining us for more on the sector, ceo from river bank. what do you make of this report?
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more importantly, what is going to continually happen? the idea being that the banks said we know we can fall into trouble. we'll put you into our special restructuring then they charge fees of 10, 20, 30,000 a month which is guaranteed to make them failed. >> my reaction to the story was not another story. when will they stop finding things wrong with these banks. the u.k. banks are the ones that seem to have all the problems or problems only so far have been found in the u.k. banks. further afield i'm sure there's plenty of conduct but that's probably not a story any time soon. >> are we going to find problems as we go through this period of ecb stress tests. >> i think it's like having the tax man come and audit you. he will find problems. he has to find problems. that is what the seat quality review and stress test is for.
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it's so we can feel a little bit more comfortable with the sector and retain or store stability in the banking system. if you go to the doctor you want them to find something wrong with you or give you a prescription. >> before we continue that discussion, other things we'll give you. rebranded unit will begin its road relatively soon. the ecb president mario draghi is meeting with banking ceos from many countries today. it's his third meeting from banking chiefs. it will be subject to a comprehensive assessment on whether their institutions can withstand future crises. what is the most opaque part of the view of the banking system? >> this is what mario draghi wants us to do, to get away from this idea that there are
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problems in different nations banking systems. the german system is worse than the italian system. these are banks operating in germany or operating in italy. if you have one regulator, if you have one set of rules and one way of judging them, which they are now working on, then i think that's the -- >> yes. one way of bailing them out, have we? >> we are working towards that. >> if it comes down to an individual country bailing them out, then they are german and italian. >> at present there is a reason for the states to stand behind their banking systems. a country's ability to bail out its banking system has reduced somewhat inasmuch as the threat of doing that would -- the burden would first fall on subordinated bond problems. that may be a step the governments don't want to take. already now we have a
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centralized european way of thinking about bailing out banks. we know that it's in the front line so you're right. the mechanisms to bail out banks should be in place quickly. they should be in place by the time that the asset review is finished. >> what do you think we're going to get from germany and france on resolutions? >> we've been given tight time lines that they failed to meet. i don't know. i mean, i think if they use the aqr as an excuse to do so, then they'll probably find something that they need in order to push that. >> where's the opportunity at the moment for banks? we know where the risks are. where's the opportunity? >> in some ways i think it gets worse from here while people
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worry about the asset quality review. the outcome is one to restore confidence. this time next year some banks will do badly and ones that are sort of well known to have problematic assets. however, i like to think on the european union basis, some companies have a first level. those countries where the regulator has been more proactive. you started by asking rbs. rbs has been through some problems. the regulator finds problems. i take confidence in the regulate or being all over them. it's less so in all of europe and portugal. the spanish banks, they've been through their stress test and aqr last year. they had to do it three times to get it right. therefore, i wouldn't expect too many horror stories to come out of the spanish banks next year. >> always good to see you. thank you so much indeed. any thoughts and comments, e-mail us worldwide cnbc.com.
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swiss voters have rejected a law which would have limited a pair of executives. we'll get the details and ask what it means for those calling for a compensation cap. more details emerging of a major ipo action in china at 10:30 ct. new help for asian markets. and for years abu dhabi has been an oil based country. the country is trying to diversify a little bit. at 10:50 we'll hear about soaring housing prices as infrastructure kicks in. we're off to ft. lauderdale, florida, for a list of particulars and what to expect on today's release of u.s. pending home sales. "worldwide exchange" continues in just a few minutes.
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>> announcer: you're watching "worldwide exchange." we've got some news out of thailand. antigovernment protesters are outside of a thai government information area. we'll get the latest on thailand when we talk about the investment implications on that. keep your eyes here. they have talked about silvia berlusconi's release.
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they'll vote whether berlusconi should lose his seat in parliament. napolitano said any protests should stay within the law. swiss joeters have rejected a law. the one in 12 initiative would have made it illegal for companies to pay any of their staff more than 12 times the wage of the earner. the vote was held after the youth wing of the social democrat party gained 100,000 signatures to force the poll. voters had rejected that proposal by 66 to 34%. the vote is just the latest in a series of european proposals designed to curb executive pay. carolyn is with us on set. what do you make of the vote? how strong is the movement? >> the prompt overall is very strong. remember, it's just a couple of months ago, early in march, we saw the passing of this so-called fat cat pay vote.
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that will curb once -- once it is passed in the law it will be curbing the golden hand shakes, the golden parachutes. it will enable some of the shareholders to have a bigger say in what executive compensation can look like. this latest move is overwhelming of rejection against. i don't think it's too much of a surprise given that this one to 12 vote, that would have been very, very extreme. i mean, if you look at some of the multiples for switzerland, rocha's ceo gets 251 times. ubs credits is more like 100. nestle's is more than 200. had this gone through, this would have been very, very punishing for some of the ceos. obviously there was heavy lobbying on part of the politicians and the companies for the vote not to go through. it's not the end of the movement because over the next two years we are still going to be seeing two full proposals in the same vain. one proposes a minimum wage of
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22 franks an hour. i think 4,000 in annual compensation. 4,000. yes, another one calls for the unconditional income for all adults. whether you work or not, you would get income in switzerland. >> whether you work or not? >> whether you work or not. >> okay. is that different from unemployment benefit? >> that i'm not so sure about. >> all right. brian kaplan -- stay with us. brian kaplan, the banker, is with us in studio. brian, is the sbwiss vote the right way? >> i think common sense prevailed. it would have caused chaos. it's so strict, one to 12. clearly there is a mood to change. i think it's throughout the western world. there's a feeling that the shareholder packages isn't working the way it should be. really the executive pay should be the shareholders. we haven't seen them do their job properly.
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>> what is this, increasing it in the global world. it's a global company. what's the comparison we're making? the comparison, should it be with the swiss? should it be what's happening in the u.s.? is the problem u.s. shareholders and u.s. stocks? >> yeah. i think the problem, exactly, is partly in the u.s. as you just mentioned. i think the solution has to be a global solution. something like the g-20. it doesn't involve saying the ratio has been one to 12, it involves mechanism in the shareholder structure. it's interesting you mentioned the focus earlier in the year. in that vote they said the shareholders must vote on major salary changes. i think that's the right way to do this. you basically tell the companies what you expect. you don't lay down specific guidelines. i think in the long term that's
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getting better results. >> have you seen the shareholders, not necessarily on tape. >> that's right, yeah. in the environmental area you've got to think of setting standards for how companies are supposed to behave in the environmental space. why don't we have the same sort of thing in the paid space, you know? not only that, how much companies borrow. i think the other key thing is it's okay to pay people money. i don't have a problem with that. it's when you pay them money and they don't actually deliver and there's no retribution. >> brian, do you think that switzerland could act as a role model forex he cantive pay? the big difference that i see between switzerland and the rest of the world is the fact that switzerland can't bring up refr
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ren dums becau -- referendums? >> interesting, it's already -- they've already been through this method. they have the golden hand shakes and the golden parachutes. the ex-ceo was going to claim 78 milli million. that appears to be absurd and it should be absurd. so i think the swiss launching a debate, we'll probably see it next in the european union and maybe in the states as well. if you lead the way you would have all the major industrial powers and you'd be setting a standard. >> thanks for that. brian campbell, carolyn, thank you. here's a story for conspiracy theorists. jamie dimon met with people at
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buckingham palace. according to the reports the guest list included tony blair and kofi annan. the event was hosted by prince andrew, duke of york. considering jpmorgan's considerable legal bill in light of the recent $13 billion settlement, what do you think would be a more appropriate venue for an event? let us know. get in touch with us. e-mail us, tweet or direct to me. was buckingham palace too rich a place for jpmorgan to be hosting? still to come on the show, reform expectations in china regarding the rural land. the government has reinforced its band. what exactly does that mean? we'll get the latest from hong kong. see you in a few minutes. ya know, with new fedex one rate
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>> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. headlines from around the globe. oil prices down after western powers reach a landmark deal with iran. the foreign minister is met with jubilation in tehran. early reactions from around the world are slightly more cautious. >> this first step will create
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time and space over the next six months for more negotiations to fully address our comprehensive concerns about the iranian program. airline stocks are flying higher. leading the way in a broader stock market alert. peugot shifts into high gear. they're lining up candidates to replace its ceo as part of the chinese along with dongfeng. the death toll from friday's pipeline explosion climbs to 52 people. european equities are climbing high following seven straight weeks of gains for the s&p and the dow. the ftse 100 is up half of 1%. xetra dax is up 3/4. down .2 for the ftse.
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on bond markets, ten year treasury yields, 2.75%, barely budged. during last week we were up to nearly 2.8% on yields. on the currency markets, dollar yen is up at a six-month high. it has been this morning, 101.72 is where it stands. we had been up to 101.90. europe is up four year highs this morning. euro dollar has come back slightly, still above 135. starting to just come back from the 162 plus levels that we also have on friday. the driver this morning has been brent and oil. down nearly $3. currently at 109.08. we had been down to 108.05. nearly a buck lower. this follows the historic nuclear deal over the weekend. after four days of talks in geneva, the u.s., brittain, china, and russia agreed to ease economic sanctions against iran.
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that's for iran curbing its nuclear technologies. nbc's andrea mitchell has the details. >> reporter: the secretary of state arriving in london only after hours of around the clock talks happened. >> now the really hard part begins, and that is the effort to get the comprehensive agreement which will require enormous steps in terms of verification, transparency, and accountability. >> reporter: after being briefed the president in an unusual late saturday night speech defended testing iran's intentions. >> the burden is on iran to prove to the world that its nuclear program will be exclusively for peaceful purposes. >> reporter: the agreement freezes iran's nuclear program for six months and rolls it back in key areas. iran can still enrich uranium but at levels well below what would be needed to produce a weapon. it will stop installing knew
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centrifuges and stop building a plutonium holder. 6 to $7 billion from some of its frozen foreign accounts and the promise of no newanctns for six months. the sanctions barring iran from international banking and the embargo on its oil exports continue for now, but the agreement has united arab states like saudi arabia and israel who say iran cannot be trusted. prime minister netanyahu condemned the deal. >> this agreement has made the world a much more dangerous place. >> reporter: president obama called netanyahu today but the two leaders disagree on the threat and the goal. obama pledges to stop iran from getting a nuclear weapon. netanyahu wants to stop iran from even having the capability to produce one and many in congress agree with israel. >> we're sending a signal to iran that they can continue to go ahead and by talking and acting like they have goodwill
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can get away with at least nuclear weapon production capability. >> reporter: the geneva agreement came together two months after president obama first talked to iran's president rouhani on the phone. in fact, top u.s. officials have been meeting secretly with iran for a year laying the groundwork. >> if this interim deal does ultimately translate into a comprehensive deal that eliminates the iranian nuclear program as a threat to the middle east, that's an enormous victory for america's global interests and those to our allies. >> reporter: in his call to prime minister netanyahu, he tried to assure him he will be consulted but israel's worry is the president is too eager for an agreement and not driving a hard enough bargain can tehran. >> nbc's andrea mitch jooljool. china is firing back. on saturday china formed a new
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air defense zone that includes the disputed islands in the east chien into sea. the u.s. and japan say the move is destabilizing and could escalate risks. beijing says it will take defensive emergency measures against aircrafts that fail to identify themselves properly. asian officials must now tell beijing their plans before entering the area. the japanese prime minister says it's not enforceable. >> t >>. >> translator: the measures have no validity and we demand china revoke this. >> there are signals out of china that beijing's new reform push may apply more quickly to some areas than others. it was to allow trading of rural construction land. they ordered a halt for home sales that don't go through state planning. meanwhile, china's security chief is pushing forward open
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court trials. he says he wants more judicial independence. he'd also like more transparency including audio and video recordings of court trials. joining us with his thoughts, chief strategist at real economics.com, p.k., good to see you. >> good to be here. >> the fact that they're not relaxing controls straightaway on small property rights housing, does that suggest that, look, whatever reforms have come out, we need to see them enacted over some period of time? >> absolutely. i mean, this is a ten-year program of reform. just because there have been some hints along these lines, it doesn't mean that everything that's -- that was agreed at the plenum will get implemented immediately. so this is reform of rural
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property rights, it's something that's been talked about for almost a decade now. there clearly were hints during the plenum that it will begin to get enacted but it will take time. i expect that it will happen over the course of the next two or three years. it will not happen immediately and at a minimum you need to go through the state planning process before taking advantage of this. but really the idea is to take the speculative pressure away from urban land. some of that is moving towards rural land. that is actually somewhat helpful for china. >> what is -- out of everything that we've heard, p.k., on the reforms, what do you think is the one that's going to have the biggest impact for investors? >> well, i think all of the reforms will have a significant impact over a fairly -- over a medium term. to me, the greatest danger in china still remains the fact that monetary policy has been excessively loose over the last five years.
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we've had monetary growth of a spectacular pace over that period. m 2 money supply in china is now nearly 18 trillion u.s. dollars up about 6 trillion before the global financial crisis. that enormous growth in money supply really needs to be contained before anything else can happen. now at the same time, of course, there are moves towards using the market mechanism and that, to my mind, is the most fundamental. the fact that the market mechanism will become basic factor in all of the factor markets. it is going to have a significant impact over the medium term but the impact will be positive in some senses but there will also be some negative consequences. for instance, from allowing more
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active flows of capital in and out of the country. >> all right. let's move on to other areas in the region. we have tens of thousands marching through the streets of bangkok. they're kalg for the thai prime minister to step down. the second day in a row of divisive actions. investors sent the set index lower. we have more than 1,000 antigovernment protesters occupying the finance ministry as well as reports they've also been sent on or also moved onto the news ministry as well. p.k., how much of these protests or this political uncertainty is going to slam the economy? >> it will certainly have an impact. it's bad news that this sort of protest movement has resurfaced in thailand.
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what is clear is that in thailand over the last 12 years every election that has been held has resulted in the victory of money that currently rules thailand. basically the shinowatra party has won every election in the last 12 years. there have been about six held during that period. each time the same party has won. but, of course, these sorts of things bubble over every two or three years. the prime minister has had just over two years in office and i suppose she has run out of the honeymoon period and is in trouble. she has a decisive hold in the parliament. these are destabilizing. it will have a modest impact.
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gdp is below 3%. inflation is low. manufacturing is virtually stagnant. so there is, in fact, room, i think, for thailand to look at easing of monetary funds. everything else is going to fall to the way side while these protests continue. >> meanwhile, we've been looking at the impacts of the typhoon in the philippines. obviously a very negative impact. vietnam though, there is a very organized response there. i know you want to talk about vietnam. what does that suggest for you? what has that done for the credibility of the government? >> well, it's helped the credibility of the government but, of course, the typhoon was much more severe in tacloban and in the island of leyte in the philippines. by the time it hits landfall in vietnam it had reduced in
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intensity. so that helped a little bit, but vietnam's response was very organized. i think it's helped the credibility of the government. the prime minister was struggling over the past couple of years. i think his effective response has helped frmpt a macro economic standpoint vietnam is continuing to look quite good. it's had among the strongest export and import performances anywhere in asia this year and it's balanced. the trade deficit remains small. inflation is well contained so that the overall macro picture is improving despite the fact that the banking system is still dealing with the aftermath of a severe property bubble over the past five or six years. there is still that problem, but the macro economic situation is much improved and i think the
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dong is stable and well supported of a very strong export led recovery there. >> p.k., always good to see you. thanks for that. have a good week. p.k. joining us from real economics.com. retailing shares in tokyo closed up 2% today. they're reportedly planning a second listing in hong kong. according to the wall street journal it could happen next year. a couple of companies expected to be listed on the s&p. they've gained 36% in the first half of this year. they're expected to be hong kong's biggest ipo this year worth up to $2.5 million. ever bank is making a third attempt to list in hong kong looking to raise $2 billion. still to come, my next guest says that fears over japanese
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inflation are unfounded. find out why he thinks low prices might be a good sign. more when we come back. honestly, i'm not looking for five-star treatment.
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hi, ross. the national forum in tokyo and he said the economy is steadily moving towards its goal of a 2% inflation target. he did admit the goal remains an ambitious one but he said it was attainable in 2014 or 2015. he said they will continue their ultra loose monetary policy. meanwhile, ecb government is also speaking at the forum. they're not facing delags but is at the risk of lower deflation for longer. they explained that the ecb decided to cut interest rates to avoid price trends. another executive director said at the forum that monetary policy alone will not lead to a sustainable economic recovery. he also stressed that the health
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of european banks is crucial and that progress is being made on that front. that's it from the nikkei. back to you, ross. >> thanks for that. ecb president mario draghi said the recent cut was not based on deflation risks. he thinks the bank needs to create a safety. we're joined with more by the ceo from aliant. is there a difference? we have core inflation .8% which is a record low for the eurozone y. won't . why won't it go lower? >> this isn't something that calls for monetary action. we have for a long time claimed that we need to reduce the prices and we need to reduce wages and especially in the southern periphery of europe. that we need some internal devaluation as it was called to make the economies of the south
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competitive again and just this is right now happening because of wage reductions and productivity increases in some economies. the prices are trending downwards. i think this is the type of good deflation which we should not be trying to kill. >> so the ecb shouldn't worry about inflation targeting then? >> no, i don't think so. this special phase of adjustment out of a very big disequilibrium, imbalance of the economies, i think we will need very low price increases for some time. by the way, we don't have deflation, we have only low price inflation for some time in order to rebalance the economies in the south especially. i think what the ecb should be doing is make sure there are no liquidity crunches for the banks. this is still a problem and the ecb's the lender of last resort
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here. i think willthe liquidity moves would be better. >> when should the ecb worry about the inflation mandate? do you sort of pick and choose when to worry about it? >> well, of course if inflation really becomes negative, if that should happen, then there would be some need for action. personally i don't think this will happen. presently we see a very negative development on import prices in the eurozone that has to do with a fairly strong euro. i don't presume the euro will remain that strong for long so if import prices change trend then inflation will pop up. the same will happen if commodity prices stop their downward trend and oil prices, that would also reignite inflationary pressures. i don't think we will be in for negative territory price increases next year. that, however, would be a need
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for action. >> just talk about competitiveness, regaining some competitiveness. regaining competitiveness only because we have incredibly high levels of unemployment. it's quite a cost to pay, isn't it? >> it definitely is. but i don't think there is a way to really, you know, get rid of these imbalances that have popped up without some decline in the economies, without some unemployment. many of the countries in trouble were completely over leveraged. the best example is spain and quite a few other economies as well. the adjustment means that debt is paid down, that demand is weaker for some period of time, therefore, there is unemployment. that goes up. parallel to that, real wages go down so over time employment will improve, but this is a very painful adjustment. i don't think monetary policy is
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in a position to do anything about it, actually. it's basically about creating more employment, being more flexible on wages, working our regulations and so on that could help curb unemployment somewhat. >> michael, justifiably, i think you've hinted you don't think they will. the ecb cutting deposit rates you don't think is warranted. doesn't mean they might not do it though? >> it could be that they do it. there's this discussion about negative interest rates. personally i don't think this is -- this would be a big contribution to reviving the monetary markets -- money markets in the eurozone. the problems that there are still some weak players in the money markets that are -- that don't have the credibility you need to get short-term liquidity from partner banks so it's an
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issue of capital -- of capital adequacy. it's an issue of credibility that some banks are still you would say clients of the ecb, permanent clients of the ecb. up won't get rid of that just by cutting interest rates. what you need is a restoration of confidence -- yeah. >> -- in the banking market. >> okay, michael. thanks for that. have a good week. now for years abu dhabi has been an oil-based economy. the country is trying to make some moves to diversify. the folks on retail and finance have seen property prices so i remember. we have this report. >> reporter: five years on from a massive property bust that left countless projects unfinished and the government itself out of pocket, dubai is back with billions of dollars in new developments already underway. property prices are surging, up as much as 40% since january,
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and rental prices have been hiked up as well, between 15 and 22%, but now the building boom is raising the prospect of another property bubble and neighboring abu dhabi is itself picking up the pace. >> we've seen the sales market, we saw 8%, 5% quarter 2 and quarter 3. for the rental market we've seen more modest growth. we saw initial growth and stabilization this year. >> what's driving demand? analysts say a shortage of new homes plus a decree requiring all federal employees red wings to trade their commute. >> the product under development today is vastly different than 2007 and eight. that's because primarily the developers have aligned their product with the broader interests of the abu dhabi vision, let's call it, of providing affordable housing to as large a slice of the population as possible. and that will come through via
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national housing programs as well as export oriented product that is more affordably price the. >> add to that government products like abu dhabi projects that are expected to bring expats and tourists alike. >> this is very much linked to the government spending revenue sources and investing in revenue structure, economic development. it's very positive in that we have the airlines expanding. we have a number of free zones focused in a number of sectors. when that happens it will generate additional demand. then it will be very positive for the housing market, the retail and also for other sectors of the real estate market. >> and so with the uae largely immune to the politics engulfing its neighbors, the emirates are looking at expats. hadley gallon bell, cnbc news, abu dhabi. and as far as the agenda in
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asia tomorrow, despite territorial talks, they'll hold their third round of free talks in tokyo where the bank of japan will release minutes from the october 31st meeting. china launches its new carbon initiative in shanghai. we'll get reports frp china gas, chow tai fook interim. will the possibility of fed tapering scupper the santa rally. gina santos will be around the desk. the second hour of worldwide exchange comes up after this.
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you're watching "worldwide exchange." i'm ross westgate. your headlines from around the globe. oil prices fall after the world powers have a deal with iran. early reactions from around the world are more cautious. >> this first step will create time and space over the next six months for more negotiations to fully address our comprehensive concerns about the iranian program. >> airline stocks flying high on the fact of lower energy prices. leading way for a broader stock market burst. peugot shifting into high
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gear as they're talking about lining up candidates for the ceo with its partner dongfeng. stronger skies for boeing. they issue an alert. possible problems with icing on engines for two of its newest jets. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. all right. if you've just joined us today, global trading week here on cnbc, we saw the dow and s&p up for the seventh straight week. right now futures are indicating they're higher again around 48 points above fair value for the dow. the nasdaq is some ten points above fair value. the s&p 500 is currently under 5 points above fair value. the ftse cnbc global 300 is up .2%.
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asian he can witt its, slightly more mixed. a focus below. nikkei 1.5%. shanghai is down. the focus has been on the impact of lower oil prices. we saw brent down $3 at one stage to 108.05. this announcement, we'll have a six-month period to see if we can get a big agreement between iran and the rest of the world which will enable sanctions to be eased up. the question is will it start iranian oil flowing as well. that has had some impact on european equities this morning. it means the ftse 100 is up. xetra dax is up 8%. just at 9,300 level. the ftse is down .2. the impact the oil price is seeing in the sector breakdown. airlines, that sector 1.5% along with autos. talk about peu got in a second.
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the weaker sector, oil and gas down .2%. we've seen the oil price slip. as far as bond markets are concerned, ten year treasury yield holding on to levels where we were by the close of play 2.75%. up near 2.9%. the economic currency markets, dollar yen today has hit a six-month high of around 101.89. just below it at the moment, 101 point poip 69 euro dollar. come down slightly. above 1.35 last week. one stage down over $3 to 108.05. right now 108.82, plent brent. nymex is at 39.51. just following the historic deal over the weekend. it came after four days of talks
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in geneva. eventually the u.s., brittain, france, china is agreeing to ease restrictions on tehran. >> this first step will create time and space over the next six months for more negotiations to fully address our comprehensive concerns about the iranian program. because of this agreement, iran cannot use negotiations as cover to advance its program. >> now iran's negotiators returned home to cheering crowds with the foreign minister haled as an ambassador of peace. speaking in a national broadcast, they said the six month period was the beginning of a new experience for the nation and eventually the regime of sanctions would be broken. gina sanchez is chair woman and founder joining us for the rest of the program today. gina, thanks for joining us. we've got this agreement which we didn't think we were going to have.
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we've had six-month agreements before that have broken down. >> right. >> how do you think this is going to play out? if we do start getting iranian oil back, that has big implications for everybody. >> absolutely. if we get iranian oil back on, you'll see oil going lower. that will be net positive for a whole lot of factors, the economy particularly, the european economy, european stock market. we're seeing that today. i was recently in the middle east. interestingly the mood over there is actually quite positive around the potential for getting a deal. there are two sides to this story. there is the siede that suggest if they can create a successful nuclear program, that nobody will be able to pick on them and that they would do whatever it takes. however, everybody can see that the sanctions have been biting and biting very hard and i think
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that is what is causing the negotiation and the discussion. >> yeah. the interesting thing is we'll have to see where we go for the next six months. it's not clear whether the agreement recognizes iran's enriching uranium or not. we'll have to see where we go for this. does the benefit for europe and struggling economies, the implications for economies like saudi arabia and then others like russia sls involve a significant one? >> enormously significant. if you look at a break in the oil price across most of the countries, particularly saudi arabia, given what they have had to do in terms of offering incentives to quell the arab spring, that actually is a substantial. the break-even oil price is no longer in the 30s or 40s or 50s. it's now up in the 80s which suggests that actually oil dropping is not a good thing for
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the fiscal budgets of saudi arabia and many of the other gccs. stay there. let's get more on how this deal came to be broken. ayman mohyeldin is with us from nbc. ayman, how big were the steps to gets to this agreement? >> well, that really depends on who you ask because certainly both sides are saying there are some important deals for both sides. the united states has come out saying that this deal reverses some of iran's nuclear development that makes it even more difficult for them to obtain a nuclear weapons capability in the interim period. they're not rushing to that as these negotiations will get underway over the course of the next six months. the iranian government says they want a major concession and that is the right to enrich nuclear -- or the right to enrich uranium, part of their nuclear program. that was a big point. both sides are spinning this to be a victorious moment for their
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arguments over the last several days. >> what happens now do you think with the negotiations? i mention this, we've been here. we've signed interim nuclear agreements between 2003 and 2005 all of which fell apart. >> well, this time you're going to have some specifics unfold immediately, and that includes for the international community the right of international inspectors to vits it some of iran's nuclear facilities almost on a daily basis. they will also have to ensure that iran destroys or neutralizes some of its stockpile, particularly uranium enriched above 20%. >> that will be a very rigorous inspection process that will get underway. more importantly for the iranian government, they want to see some of those sanctions -- sorry, some of the economic pressures or restrictions put on its economy lifted. you can expect $4 billion that were part of this agreement to be accessible to the iranian
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government in the days ahead. it's a confidence building measure, but as you highlighted, the real challenge now will be the negotiations, negotiations to reach a comprehensive deal. the ultimate challenge for the months ahead, there's no guarantee that six months from now you will have a comprehensive deal. we could very well see ourselves where we were back in the early 2,000 years. as you were also mentioning, there are hard liners in both countries, in the united states and iran that are going to be raising the pressure on the leaders of those countries to not abide by this agreement. we've already heard some conservatives in the u.s. congress talking about imposing sanctions and without a doubt some of the conservatives will be saying that iran has given away too much of its nuclear program. >> ayman, thank you very much. gina, citigroup says the geneva deal should cut global oil prices by $30 over time. enough to depress brent below
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100 and u.s. crude below 85. they say falling energy prices marks the end of the commodity super cycle? agree or disagree? >> i would generally agree. there are a lot of folks calling for the end of the commodity super cycle for some time. part of that super cycle was the result of financial money flows coming in and part of that was, you know, the actual burgeoning of the use of these various natural resources in the development of infrastructure of these countries. that isn't stopping. obviously we're going to continue to see the development of infrastructure throughout the emerging market. that continues but that slows. as that continues over the next decade, the commodity super cycle will continue. >> if you want plenty more about this story on iran's break through deal and whether it has a long term reduction on oil
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prices, log on to cnbc.com. you can follow us on twitter @cnbcworld. >> meanwhile, u.s. equities have had seven straight weeks of gains. the s&p is up around 25%, the russell 2000 up over 30% this year. certainly the smaller midcaps have done better which suggests they've had a -- have they had a bigger rate in the s&p and therefore is the value in the bigger fortune 500 companies? >> they are certainly the most overvalued. if you look at pes at the small and midcap level, they're really running quite rich relative to large caps which are also slightly rich but not nearly to the level that small caps are. that's partially because of liquidity. that's been an enormous beneficiary to the smaller cap space. >> how does that set us up going to 2014? we've had a rerating this year.
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>> yes. >> you can't get two years of rerating, can you? further growth will have to come on the back of presumably better revenue? >> right. real revenue. >> real revenue. absolutely, i totally agree with you. one of the concerns i have going into q 4 is q 4 expectations for earnings are actually quite healthy. i think the chances of actually hitting those expectations if you compare it to q 1, q 2, q 3 where we have hand dilly beaten expectations. right around this time last year that actually set up the bar for some very big leaps. we've sailed through earnings seasons for three-quarters in a row and we've had the benefit of liquidit liquidity. we're going to have a higher earnings from q 4 and we're going to be watching zblsh that's not out until january? >> true. >> so, therefore, there's nothing to stop us. >> there's nothing to stop us from continuing to rally into the end of the year unless we
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see any indication in the december fmoc meeting that we might get a taper. >> i merely sneezed there. it wasn't you. thanks for talking while i was trying to stop sneezing. plenty more to come. e-mail us. also still to come, the ipo market could be set to surge from now to 2014. we'll look at the companies reportedly set to go public right after the break. [ male announcer ] this store knows how to handle a saturday crowd.
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recap of the headlines. brent falls by more than $2 after there's an historic interim nuclear deal. the dax hits a new all time high. boeing issues an alert of possible engine icing problems on two of its newest jets. other stories we're following today. the french car maker peugot is interviewing candidates. shares of peugeot is up 8%.
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they hope to beat the additional ipo slowdown over the holidays. they look to raise 1.5 to $2 billion which would value the company between 9 and 12. the ipo would help monetize by a uae retiree. fiat ceo says he doesn't want an ipo and would prefer to buy out the trust. a couple of chinese financials are expected to be out. they're expected to gain 30% this year. everbright bank saw its net profit climb 14% in the january to september period. it's making a third attempt to list on hong kong. it wants to raise $2 billion.
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gina, no doubt ipos are back in favor. the best years we've had before the financial crisis. what does it suggest to you? >> this has been actually quite positive, actually, to see the ipo market coming back, at least starting to revive because, you know, we've been expecting -- i have been expecting consolidations and movement in the mna space as well as the ipo space. watching the ipos come out, part of that has to do with the fact that it is a very liquid environment. as that continues, there is definitely -- this is the time to be issuing, if you're going to try to issue. i think there's also going to be probably a rush before it ends so i -- >> when does it end? >> when does it end? >> does that depend -- is there a tapering for you that has to be brought in? >> that is the $64,000 question or billion dollar question as it turns out. you know, i think generally the -- we know the markets are
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expecting a taper somewhere around march or possibly even farther, especially given janet yellen's most recent commentary. however, if you look at some other fed voting members like james bullard, james ballard was quite balanced going into the tapering meeting. he's become somewhat hawkish saying we are seeing some significant movement in the labor markets that would actually suggest that it might be time to taper. my expectation was sometime in january. that is going to be ahead of markets. >> talk about that. more to come on that view. the italian government is going to call a confidence vote on the 2014 budget according to the minister. we'll keep our eyes on that. this comes as well as italy's president has rejected sill have i yes berlusconi's pardon. it's a crunch week for the former prime minister as the senate will vote on wednesday. phillip berlusconi should lose his seat.
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georgio napolitano says it should stay within the law. right. also, i'm waiting to see whether they've got a time or date for the confidence vote on the budget. we haven't yet. here's a story for those conspiracy theorists which involves one of the world's biggest banks. the jpmorgan boss jamie dimon met with clients at buckingham palace. it included tony blair and kofi annan. that was hosted by the prince of york. the legal bill and a $13 billion settlement with the u.s. government, what might have been a more appropriate venue for the event if you didn't think it was buckingham palace. respond, tweet it in. bailey, they've got some wonderful ceilings.
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if you want to join the conversation here on worldwide exchange, get in touch with us. e-mail us. or tweet us. direct to me @rosswestgate. if anybody wants to know what the old bailey is, the criminal court. >> that's the best answer you could have gotten. >> really? >> i think it's hilarious. >> actually, i think it would be fun to host a party -- >> absolutely. >> -- in the old bailey. >> fantastic. >> run around, jump in the judge's chair, put some wigs on. >> absolutely. >> have fun and games. with that, no reflection on you as a person or anybody else, just as a venue it stands up. still to come on the show, is it time to build up your portfolio with some infrastructure. we're going to find out. brick by brick we'll break it down. hi honey, did you get the toaster cozy?
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yep. got all the cozies.
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with my united mileageplus explorer card. i've saved $75 in checked bag fees. [ delavane ] priority boarding is really important to us. you can just get on the plane and relax. [ julian ] having a card that doesn't charge you foreign transaction fees saves me a ton of money. [ delavane ] we can go to any country and spend money the way we would in the u.s. when i spend money on this card, i can see brazil in my future. [ anthony ] i use the explorer card to earn miles in order to go visit my family, which means a lot to me. ♪ infrastructure investment funds have largely weathered global uncertainty according to a study by deloit. they've met or surpassed internal targets. joining us is infrastructure investment partners and gina is with us.
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jason, great to see you. do they cheat those returns by keeping them safe? >> yeah, i think we've done that in the last couple of years. the funds particularly, i've spent a lot more on asset management and scaling up their capability. they've done that. they very much have flight and capital to core infrastructure assets. the regulator assets. it enhances infrastructure assets. they go back to the safe haven for infrastructure assets, yes. >> is that going to change? is there -- do we have confidence at the moment? >> i think you'll see consistency around that with a number of funds. i think the fact you're seeing more direct investors intermediating the funds and going into the assets themselves, they are very much seeking the core infrastructure assets. you may give it a change. it's innovating and looking for
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slightly more tangential assets again. i think overall i still think we'll see capital chasing these. >> this is interesting. we've said this in the link. a lot more asset managers are being brought in to run this. suggest there was an issue before that they're trying to resolve. >> i think it's more an evolution of where the funds were, actually. if you go back to sort of the early 2001, 2002 and the funds first started it was very much an origination platform for the funds. as they built up their portfolios they have to scale up. i think it's an emergence of the asset managers themselves to allow both the deal teams to continue to originate transactions for buyers but also to police and optimize the votes they have. the findings are very clear this time. the scale lability of the asset management team is a lot mier in 2010. i can see that continuing in the
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future. >> have you seen a change at all in sort of the regions, the geographies where these asset managers are playing? are we looking at development of infrastructure, aging infrastructure in developed economies? are these becoming a little bit more emerging market plays? what kind of changes? >> i think there's a couple things. in europe there's a focus on western europe, northern europe, particularly interested in scandinavian countries. there's been a bit of a disenfranchisement with southern europe. we've seen that notably. i think if you look globally, still think there's a lot of appetite of north american infrastructure although the deal flow there is slower than what the investors looked for. if you look for emerging markets, i think the interesting point there is definitely an increase in the markets around the world, particularly south america where there's a lot of interest. the one notable exception is india and china where over the
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last sort of two or three surveys there's been a decreasing interest from the investors in both india and china as seeing the growth. i think that applies. >> that is interesting. clearly, surveys show infrastructure is different. what about exits. at the moment private equities are really happy, right? they have a route to exit. when do these guys exit? >> that's the one people are trying to call. we've not seen many over the last two or three years. i think that is consistent with the investors in this asset class are in it for the long term and in it for the yield. notwithstanding that, the first generation -- is very much like private equity funds. in the next two to three years,
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we almost expect that to be more exit over the next two to three years, particularly around the core infrastructure assets. i guess the question is, are they right for ipo. we were talking before i came on air, are they right for ipo. i don't think we'll see a lot of the ipo. i think we will see them around some of the assets or some of the waste assets as we did recently. >> jason, good to see you. still to come as well, u.s. home sales are rebounding last month after a steep drop in september. could a fed taper put a choke in the housing market? more coming up. avo: the volkswagen "sign then drive"
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this is "worldwide exchange." here's a recap of the headlines today. oil prices fall after western powers reach a landmark deal with iran. foreign minister from iran is met with jubilation in tehran. early reactions from around the world, a little bit more cautious. >> this first step will create time and space over the next six months for more negotiations to fully address our comprehensive concerns about the iranian program. airline stocks flying high on the back of lower energy prices as a result. that's leading the way in a broader stock rally in europe. the iranian deal boosting risk appetite. there are more stormy skies
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for boeing. the company has issued an alert to more than a dozen airlines about possible icing problems with engines on two of its newest jets. >> announcer: you're watching "worldwide exchange" bringing you business news from around the globe. if you've just joined us in north america, welcome to the start of your global trading week here on cnbc. we've had seven straight weeks of gains for the s&p and the dow. it looks set to continue this morning. we have fresh record highs for the german index. as far as the futures are concerned, the s&p 500 is currently around four points above fair value. the nasdaq at the moment is some 11 points above fair value and the dow at the moment is some 49 points above value. european equities, we were down last week by the ftse by 19 points. it's up 19 points at the moment. xetra dax, as i say, all-time
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highs. we just hit 9,300 a short time ago. just below it. the cac quarante is up. the ftse is down .2%. there's going to be a vote on the 2014 budget. we don't know when that confidence vote will be. it's a shortened trading week in the u.s. with thanksgiving on thursday. a whole slew of economic reports are going to be packed into the next three days. today we get october pending home sales at 10:00 a.m. eastern. it's 1.3% after a more than 5% decline in september. joining us with her thoughts is sherry author of "financial fresh start" with the carnegie group. what are these numbers going to tell us after the previous months fall. are we going to have a bounce-back? >> a little bit, but not significant. i think we can all agree that we have somewhat of a downward
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trend in u.s. home sales predominantly up until now due to affordability. wages are just simply not keeping up with the rising home prices. but moving forward, the most significant impact on u.s. home sales going into 2014 is going to be u.s. housing finance because of course in order to buy a home you need a loan and most americans are still getting those through fannie mae and freddie mac. we know that congress and the president have been throwing around ideas for reforming the two gses for a long time but now this month we've seen some really interesting interest from investors. increasing their stakes in the gses and in fact one fund actually offering to take over the insurance component of the gses so that struggle between government wanting to inform and investors wanting to save their current investment and perhaps take advantage of the opportunity. these values are up over 1,000 percent this year will have a huge impact on u.s. home sales moving forward. >> what is going to happen to
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fannie and freddie. at the end of the day, they're a quasi government agency. they've always done what the government has suggested they do. that's the point, isn't it? >> exactly. exactly. you know, to blame fannie and freddie for the crisis is a little bit of an oversimplification. they, of course, were following directives from the president and congress and, of course, they don't originate loans so it was the lenders who actually originated a lot of these fraudulent loans. it was homeowners who defaulted on the loans. that's a little bit of an oversimplification. there are several ideas floating around in washington for a long time but now what's taking front and center stage with the gses are these dozen or so investors lawsuits so it may actually be the courts that decide in large part what happens with fannie and freddie. you've said we've seen a downward trend in home sales in the last few months, and that makes sense since we saw a taper scare and rising rates. that will likely re -- continue
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after the new year. what kind of an effect do you think that has on the economy given that we're looking at what is otherwise a pretty weak recovery? >> well, obviously it's significant, and the rising prices, which are also expected to slow down, of course, a lot of that rising price this past year, almost 12%, has been due to low inventory and just a less number of distressed homes selling. so most of the homes selling now are nondistressed. of course this is bringing prices up. it has added a lot to u.s. consumer confidence. those price rises are expected to significantly taper as well, which we know has a huge impact on the overall wealth effect and consumer confidence. >> do you think -- do you think, sherry, that -- and i'll ask gina this as well. do you think the last bit of tapering the fed should still be
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buying mortgage securities even if they stop buying government securities? >> yeah. well, we need to have the least possible ripples in the housing market that we can moving forward into 2014. bringing the private industry into housing is going to be significant. that's obviously what washington has wanted to happen. fannie mae and freddie mac traditionally even at the peak of the bubble, ross, were only involved in 35% of mortgage originations. now that number is three times that amount so that's going to be essential. that's something that's been real interesting about this private sector interest these last few weeks, because a lot of folks thought that was going to be the biggest problem bringing investors in, and yet here they are now. of course, it makes sense. if you look at the profits, the third quarter profits for fannie mae and freddie mac were huge. they only owe another $4 billion. we're saying only $4 billion but it was $189 billion bailout. that will be repaid by spring.
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folks are expecting to see significant reform. the investors don't want be to lose their investments and they want to take advantage of the opportunity. >> fair point, share ri. thanks for that. sherry is here from the carnegie group. gina, update on the fed? >> i completely agree that they have to do as little as they can to roughly t-- ruffle the feathers of the mortgage market. that will be the last instrument they taper. they will start with treasuries. >> okay. all right. take a pause. meanwhile, some of the other stories we're following. boeing is alerting airlines about possible engine icing problems on its 747-8 and 787 dreamliner jets. they're talking about planes with a g engine not flying near storms that may contain ice particles. they're pulling two 787 jets from service.
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boeing's also inviting more than a dozen sites to bid on where the new 777 x jet will be built. these include washington state, salt lake city, san antonio, north chafrls ton and south carolina. erpgs are up 2.3%. probably because airlines are up because fuel prices are down. microsoft says it will sell more than 1 million x box game con soles on friday. the x box one was launched in 13 countries. microsoft said it sold out at most retailers and is working to restock inventory. it also adds on the first day of play it killed more than 60 million zombies in the new game dead rising iii and drove more than 3.6 million miles on the motorsports iii.
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it's up 2/3 of 1%. there were quite a few on the tube this morning. movie goers flock to see the next chapter of katniss this weekend. "hunger games catching fire" took in $161.1 million in the u.s. and canada. that's a record opening. that was previously held by twilight new moon. it fell short of the year's best debut which is iman three. "catching fire" is also raking it in around the world. it's brought in a total of $308 million. the film is produced by lions gate. the stock is up 1.9% as a result. coming up, u.s. banks may soon charge yet another fee for customers, but this time they're blaming the fed. say it ain't so. we'll talk about it after this. [ imitating engine revving ] that's mine.
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you get your hair cut here. you find that certain thing you were looking for here, but actually you get so much more. when you shop at these small local businesses, you support all the things that make your community great. the money you spend here, stays here. in this place you call your neighborhood. this saturday is small business saturday. get out and shop small. now it may always seem like banks are trying to nickel and dime customers by charging fees for everything from checking to maintaining a minimum balance. now they're also apparently blaming the fed for what could be their next big fee. oh, no. kayla -- i'm not saying oh, no because kayla is with us. i'm very happy to see kayla.
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she joins us at cnbc hq. i'm saying oh, no because we have more fees coming, kayla. what's going on. >> tell me how you really feel, ross. at a time when banks don't need to become any less popular, now u.s. banks are saying they could start charging deposit fees. that's if the fed cuts the have rate it pays on reserves. customers are already used to earning little to no money on deposits in their savings account. it will be unusual to pay to leave money in their accounts. the october fed meeting suggests the fed is heading towards tapering in the coming months perhaps as soon as december. policy makers want to find ways to add stimulus at the time. one way is cutting the interest on bank reserves. top bank investors say cutting that would lead them to pass on those costs to consumers.
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unclear at this point what those costs would look like, but they do say taking in deposits isn't free because they have to pay premiums of a few basis points to the u.s. government's deposits insurance program. cutting deposits could impact money market funds. the fed is avoiding cutting interest rates because of the concerns about the interest rates. if it does that, the fed would expand a new facility letting banks and money market funds make a deposit at a small, positive rate. that would avoid the need for them to charge customers. we'll see how this pans out. on another front, some u.s. banks are going to create a new electronic trading platform. that will control the liquidity in the $9 trillion bond market. five banks will put up tens of millions of dollars to fund it on trade web. electronic trading corporate debt is concentrated in smaller
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transactions. market access is the dominant player. the ft says its high trading costs have frustrated many broker dealers. a lot of movement in terms of u.s. financial institutions. no doubt, ross, that customer fee on storing your money at banks, that won't go over well. >> no. savers have been hit hard. thank you for that. thanks, kayla. reminder of the headlines today. brent falls more than 2% in the historic interim nuclear deal. germany's dax hits a new all-time high. the positive sentiment stocks there, boeing issues an alert on possible engine icing problems on two of its newest jets. a winter storm sweeping through the u.s. is threatening
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to head east. people are heading out for thanksgiving on tuesday and wednesday. how big is the threat? the weather channel's julie martin joins from us atlanta. good morning, julie. >> good morning, ross. already seeing some major travel headaches in places like dallas this morning as our winter storm really gets going. all of the images seeing on the map, this is a wintery mix. in the purple we have ice. all of this moving off to little rock and memphis as we move through the afternoon and evening hours and then tomorrow we are talking about more freezing rain here in the south. very heavy rainfall as well in the deep south in places like atlanta. we have a lot of winter advisories and alerts up all the way from texas over towards arkansas right now. travel will be impacted by this storm. certainly wet roadways and slick roadways. then the storm crawls up the east coast. tuesday in through wednesday meaning the very highly populated cities, washington, d.c., new york, boston for now
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forecasting rain for you, but on the back side of that we're going to see snow in places like pittsburgh and the ohio valley all the way in through upstate new york. so likely some major travel impacts come wednesday. traditionally the busiest travel day of the year where we've got millions of folks here in the east trying to get to their thanksgiving day holidays. we're looking at major delays in and out of new york city, boston and d.c. ross? >> all right. see what happens. julie, thank you very much. an historic nuclear deal has been struck between iran and world powers sending oil prices lower. iranians see it as a victory. others are cautious and some downright displeased. we'll have the details after this.
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are indicating that the rally we've seen for the last seven weeks is set to continue for the start of this thanksgiving week. s&p 500 around 4 points above fair value. above 10 points for the nasdaq. the dow currently 48 points above fair value. today the big focus is on oil. the price of brent has been down nearly $3. it's currently down 2 bucks to 108.96. we've been as low as 108.05. this is after an historic deal over the weekend. after four days of talks in geneva the u.s., brittain, france, germany, china and russia have agreed to ease economic sanctions on iran for six months. we're joined from tel aviv. duncan, what's the reaction in israel? >> reporter: hi.
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well, it's gone from outright hostility to a more cautious pragmatic welcome for the deal. certainly as predicted the israeli government is overwhelmingly negative about this deal. prime minister netanyahu said it was an historic mistake and said after this deal the world is a much more dangerous place. the defense minister said all options remain on the table for israel and the country maintains the right to defend itself. certainly though there is a sense here that relations with the united states need to be maintained and strengthened over the next six months so that israel's voice is heard when the interim deal with iran expires. to that end we know that president obama and the prime minister spoke last night by phone according to the white house version, the two sides agreed to stay in close contact on the issue. certainly a lot of the analysis and commentary here in israel today focuses on this sense away from the nuclear deal that
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perhaps this deal will somehow legitimize iran. it will no longer be the pariah on the international stage. that at a time that israel feels if sees threats from iran all around it. hess bow la, lebanon to hezbollah fighters in syria. the war happening in syria. reading much of the commentary today though, there is also not so much negativity but a more pragmatic response from the president shimon perez says this should be judged by results and not words, ross. >> thanks very much indeed for that, duncan. with the institute is gina sanchez and joining us is garrett. good to see you. when i was speaking to your colleague harry last week, he said, look, we're skeptical that any deal will hold. do you still hold that skepticism? >> yes. the current agreement essentially leaves the current oil sanctions in place. exports restricted to 1.1
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million barrels a day. we see that not changing over the course of the six months. various wavers are going to be renewed in december which means that china will also restrict their exports. in fact, the price response which you said was down $3 or so. it's come up a little bit. we have prices coming down to where they were last thursday. that's appropriate because the oil supply impacts of this agreement are zero at the moment. >> so we're not going to get much of the political risk premium coming out of the price, is that what you're saying? >> certainly in barrels there's no effect. counterintuitively we think there might be increased tensions in the sense that the response of the israeli and saudi authorities over the course of the next six months might be more vociferous. they're trying to influence the outcomes of this agreement. and we will want to be focusing on what in effect is increasing
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conflict between syria and sunni factions with not only just syria but also iraq which, in effect, is a proxy for the relationships that are happening between saudi arabia and iran. there are a lot of things still in place. why i don't think prices will be strong because of this, we certainly will discount the chances of prices falling. there's a consequence for these arrangements because the oil supply impacts are not being affected by this agreement. >> okay. i'm sorry we don't have time to talk further. thanks so much, indeed, for joining us. gina, final thought for you. that's interesting. >> absolutely. i mean, i think that the challenge that he is highlighting is actually real, which is that, in fact, there could be increased polite tension rather than a decrease in political tension. >> thank you, gina. loved having you on the program today. that's it from today's edition of "worldwide exchange." coming up next. plenty more reaction from
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"squawk box." they take over the reins on cnbc. we hope you have a profitable day.
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good monday morning. iran and six world powers, they've reached a deal to curb tehran's programs. also, a powerful storm system is threatening holiday travel across the nation. and the bulls try to end the year strong. the s&p on a seven-week winning streak. closing above 1800 for the first time. it is monday, november 25th, 2013, and "squawk box" begins right now. ♪ start me up, you can start me up and never stop ♪ good morning, everybody. welcome to "squawk box" here on cnbc.
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i'm becky quick along with andrew ross sorkin and brian who is in for joe kearnen. we're watching oil prices. if you take a look you'll see wti is down by 1.r5%. that's a drop of 1.37 to 93.47. checking out what happened with brent, that's a big drop. down by 3.8%. brent down by about $2.90 the last time i looked at it. we'll continue to take a look at that. it looks like it's down by $2. 109.05. not everyone is cheering. there is skepticism in washington. nbc's tracie potts reports from capitol hill. >> the burden is on iran to prove to the world that its nuclear program will be exclusively for peaceful purposes. >> reporter: the agreement calls on iran to stop building a nuclear reactor and reduce its stockpile of

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